Business Directories

Hurricane slows down US oil spill clean-up

Houston, June 30, 2010

The approach of the first Atlantic hurricane of 2010 halted some clean-up efforts from BP’s Gulf of Mexico oil spill and delayed plans to capture more of the crude gushing from the largest spill in US history.

The Miami-based US National Hurricane Center said Tropical Storm Alex had strengthened into a hurricane and was packing winds of about 75 miles per hour (120 kmph). It was on track to make landfall near the Texas-Mexico border late on Wednesday or early Thursday.

Alex was expected to steer clear of major oil-extraction facilities in the Gulf. Even so, efforts to clean up oil off the Gulf coast were sidelined by rough weather whipped up hundreds of miles from the storm's center.

Controlled burns of oil on the ocean's surface, flights spraying dispersant chemicals and booming operations were all stopped, authorities said.

However, BP oil-capture and relief well drilling continued for now.

About 8,475 barrels of oil were collected in the first 12 hours of Tuesday, BP said. Some 4,130 barrels of crude were flared, along with 28.7 million cubic feet of natural gas.

But BP officials said waves as high as 12 feet (4 metres) would delay for several days its plans to hook up a third system to capture much more oil from the blown-out well.

US government officials estimate 35,000 to 60,000 barrels are gushing from the well each day. The current containment system can handle up to 28,000 barrels daily. The planned addition would have raised that to 53,000 bpd.

BP's market capitalization has shrunk by about $100 billion since its Deepwater Horizon drilling rig sank in 5,000 feet (1,525 metres) of water on April 22, two days after an explosion and fire killed 11 workers.

The company's shares have lost more than half their value, but have seen sporadic bargain hunting on the way down. Tuesday was one of those days; BP's US-listed shares rose 2.3 per cent to $27.67 although stock indices tumbled.

The stock's slide since late April has also sparked talk of a possible takeover bid.

Toll mounting

The economic and ecological costs to tourism, wildlife, fishing and other industries, already massive, were still mounting for four states along the US Gulf coast.

As crude oil and dispersants float on the surface of the Gulf, crews are battling to keep it off beaches and away from wildlife breeding grounds.

The lucrative tourism industry in the Gulf could be hard hit for years by a false perception the spill has ruined all the beaches, tourism officials said.

Many businesses are on the verge of buckling. On Mississippi's Gulf coast, beach umbrellas and sun chairs have been replaced with oil spill clean up crews wearing white plastic uniforms.

"This is so sad. We cannot swim or feel safe on our own beaches. Even if they are open we will not go near it because of the oil," said Ethel Williams who lives in Ocean Springs, Mississippi.

Linda Horsby, who heads the Mississippi Hotel and Lodging Association said 2010 was supposed to be a comeback season.

"We have just started recovering from last year's economy and now the oil hits the shores," she said. "We have flatlined compared to last year's hotel depression numbers." Senior US officials continued to beat a path to the Gulf region, responding to criticism that President Barack Obama and his administration responded too slowly to the crisis.

Vice President Joe Biden, visiting the Gulf region for the first time since the 71-day crisis began, emphasized the federal government's long-term commitment.

"We're not going to end this until everyone is made whole," Biden said in Pensacola, Florida. "This region has been hit too hard by acts of God and now by an act of man."

A US appeals court set July 8 for oral arguments on the Obama administration's request to stay a ruling that lifted its six-month moratorium on deepwater oil drilling.

A federal judge blocked it at the request of drilling companies, saying the suspension was too broad and arbitrary.

The state of Louisiana has challenged the ruling, saying it is losing millions of dollars in the oil and gas industry.

Low marks

Polls have given Obama low marks for his handling of the disaster, although not as low as those given to BP.

"BP's handling of the spill from a crisis management perspective will go down in history as one of the great examples of how to make a situation worse by bad communications," said Michael Gordon, of New York-based crisis PR firm Group Gordon Strategic Communications.

The Atlantic hurricane season runs from June 1 to Nov. 30 and meteorologists predict this year will be very active, suggesting more problems for the oil spill clean-up effort.

Swathes of southern Louisiana and Mississippi are under flood watches, with heavy rains anticipated from Alex and a frontal boundary draped across the region.

Coastal areas will see unusually high tides along with high winds that have the potential to push oil further ashore.

On Louisiana's Bay Baptiste, white caps were visible in the distance as the outer bands of Alex began to move into the region. Several marshes were only partially boom-protected, with oil coating the bottom part of reeds as crabs covered in crude scurried on nearby marsh islands.

A thin sheen of oil covered much of the bay's water, a grim harbinger of what may happen in the next few days.

"Because of the spill, any effect from the storm will be bad," said Michael Dardar, 48, of Raceland, Louisiana. "High waves will drag oil over and under the boom." – Reuters